cut and paste-highlight what you want cut (not terribly easy, I'll admit that), and long press to get the menu up to copy. Just long press a text area to get the paste option.

As for sending pics, you shouldn't have any problem sending them. Just go to your albums, select the pic, and there should be a button at the bottom that looks like 2 arrows coming from the same point, called "share". Or you can probably hit menu on that same screen and do it that way. I don't think the stock messaging app resizes them at all, which is probably where your problems are coming from. I personally suggest Handcent from the market, as it resizes pics for you.